Tax Troubles in Arizona

Jan Brewer was Arizona's popular secretary of state early this year when her political career took a turn for the worse. She became governor.
With...

Jan Brewer was Arizona's popular secretary of state early this year when her political career took a turn for the worse. She became governor.

With Democrat Janet Napolitano departing for the Obama cabinet, Brewer, a Republican, assumed control in a state beset by the housing bust. She faced a $3.4 billion shortfall for the 2010 fiscal year, out of an overall state budget of less than $10 billion. She also faced a legislature so polarized that finding any middle ground was virtually impossible.

Brewer had a longstanding reputation as an opponent of higher taxes, but soon after taking office she proposed a public referendum on a sales-tax increase to help balance the budget. Her fellow Republicans, who control both houses of the legislature, recoiled. Brewer tried to strike a deal by coupling the Arizona sales-tax vote with future tax cuts, including a move to a flat income tax beginning in 2012. Democrats rejected that bargain--and Brewer still didn't get the Republican support she needed.

So, Arizona has gone through months of delays, negotiations and vetoes. Finally, in September, two months into the new fiscal year, Brewer signed some budget bills without the sales tax. The state's finances remain $1.5 billion out of balance, a problem the legislature almost certainly will have to fix in a special session late this year. The governor still hopes for a sales-tax vote, but even if the legislature cooperates, it couldn't happen until spring.

Brewer's struggles have emboldened her political opponents ahead of next year's gubernatorial election. Democrats appear likely to nominate Attorney General Terry Goddard, a formidable candidate. Brewer's biggest problem, though, may be opposition inside her own party. With conservatives angry about her heresy on taxes, State Treasurer Dean Martin and others are contemplating primary challenges.

Brewer has suggested she will run for a full term, but to do so might be an act of political masochism. "Without presuming to read the governor's mind," says Bob Grossfeld, a Democratic political consultant, "I don't think this is what she signed up for."